I'm glad that you were able to resolve your issue and thank you for posting your solution so that others experiencing the same thing can easily reference this! Since the Microsoft Q&A community has a policy that "The question author cannot accept their own answer. They can only accept answers by others", I'll repost your solution in case you'd like to accept the answer
Issue: az 2.68.0 pip broken completely
Solution:
sys.path is containing incorrect items
sys.path = [
'C:\\Program Files\\Microsoft SDKs\\Azure\\CLI2',
'C:\\Program Files\\Microsoft SDKs\\Azure\\CLI2\\python312.zip',
'C:\\Users\\philt\\anaconda3\\Lib', <<<<<<<< should not be here
'C:\\Users\\philt\\anaconda3\\DLLs', <<<<<<<< should not be here
'C:\\Program Files\\Microsoft SDKs\\Azure\\CLI2\\Lib',
'C:\\Program Files\\Microsoft SDKs\\Azure\\CLI2\\Lib\\site-packages',
'C:\\Program Files\\Microsoft SDKs\\Azure\\CLI2\\Lib\\site-packages\\win32',
'C:\\Program Files\\Microsoft SDKs\\Azure\\CLI2\\Lib\\site-packages\\win32\\lib',
'C:\\Program Files\\Microsoft SDKs\\Azure\\CLI2\\Lib\\site-packages\\Pythonwin',
]
USER_BASE: 'C:\Users\philt\AppData\Roaming\Python' (exists)
USER_SITE: 'C:\Users\philt\AppData\Roaming\Python\Python312\site-packages' (doesn't exist)
ENABLE_USER_SITE: True
If I missed anything please let me know and I'd be happy to add it to my answer, or feel free to comment below with any additional information.
I hope this helps!
If you have any other questions, please let me know. Thank you again for your time and patience throughout this issue.